The Biden administration has sold nearly 6 million barrels of oil from the U.S. Strategic Petroleum Reserve to an entity tied to the Chinese Communist Party, records show.
From September 2021 to July, the Department of Energy (DOE) has awarded three crude oil contracts with a combined value of roughly $464 million to Unipec America, the U.S. trading arm of Chinese state-owned oil company Sinopec, according to a review by The Epoch Times of the DOE documents. A Chinese firm with ties to Hunter Biden had invested in the national oil giant.
The sale would tap 5.9 million barrels in total from the strategic reserve (SPR) to export to the Chinese firm. The latest contract, revealed on July 10, was for 950,000 barrels sold for around $113.5 million.
The two most recent sales to Unipec came out of an emergency drawdown of the U.S. oil stockpile, initiated under President Joe Biden on March 31 in what he said would offset the loss of Russian oil in global markets and tame rising fuel costs at home.
“Biden is draining our strategic reserves at an unprecedented rate. This is an abuse of the SPR, far beyond its intended purpose. Sending U.S. petroleum reserves to foreign adversaries is wrong, and it undermines our national security,” Rep. Clay Higgins (R-La.) told The Epoch Times.
What the United States should do, he says, is to “unleash American energy production and ensure that our strategic reserves are stocked and able to meet the demands of a national emergency.”
Unipec’s BidsThe oil auction is price-competitive, meaning contracts are awarded to the highest bidder. Unipec, a consistent participant in previous U.S. crude oil sales, secured 1.9 million barrels over the past three months through two contracts it won on April 21 and July 10.
The DOE also sold 4 million barrels to Unipec last fall during a congressionally mandated sale.
Unprecedented DrawdownThe Strategic Petroleum Reserve is the world’s largest supply of emergency crude oil, with four storage sites in Texas and Louisiana designed to alleviate significant oil supply shortages in times of major geopolitical events or natural disasters.
The amount of oil in the SPR has seen a steep decline over the past year, more notably since Biden, blaming Russia’s Ukraine war for the “price hike at the pump,” in March ordered a withdrawal at a rate of 1 million barrels per day for six months to curb gas prices. The planned sale of about 180 million barrels marked the biggest drawdown in the reserve’s more-than-four-decade history and is set to cut the U.S. backup oil supply by about a third.
ScrutinyOn Capitol Hill, Republican lawmakers have been watching the oil sales with growing alarm. A total of 206 House Republicans voted on July 20 in support of a legislative amendment aimed at preventing the Biden administration from exporting petroleum to entities with Chinese Communist Party ties.
“It does not make sense that we are using our already depleted energy supplies to help China build up their own strategic reserves,” Rep. David Valadao (R-Calif.) said in a speech rallying support for the proposal.
China is the world’s largest importer of oil. As the West turns away from Russian oil due to the Ukraine war, China has been quietly snapping up Russian resources at steep discounts. From March through June, it spent more than $25 billion on Russian oil, gas, and coal, nearly doubling the amount from the year-earlier period, the latest customs data show. The sales volume propelled Russia to become China’s top oil supplier for two straight months from May, displacing Saudi Arabia.
Hunter served as a founding board member of BHR from 2013 through April 2020. His firm Skaneateles also held a 10 percent stake in BHR, which his lawyer said has been divested as of November 2021. On BHR’s 2021 annual report released in June, however, Skaneateles was still listed as a shareholder.
Hunter’s lawyer hasn’t responded to The Epoch Times’ questions regarding Skaneateles.
“As if Biden couldn't have bungled this energy crisis any more, this latest development of sending our strategic petroleum reserves to a Chinese oil firm connected to Hunter Biden reaches a new low,” Rep. Byron Donalds (R-Fla.), who signed on the letter, told The Epoch Times.
“For one, this administration should have never tapped into these reserves. Second, these reserves should have never left U.S. shores, and third, the U.S. shouldn't be doing deals with firms connected to the president's son,” he said, adding that the Biden family’s “continued compromising actions require strict oversight from Congress.”
Rep. James Comer (R-Ky.), the ranking GOP member of the House Oversight Committee who spearheaded the letter, noted that previous inquiries by Republicans to the DOE about the oil sale had gone unanswered.
“Under no circumstances should the Department of Energy be making decisions which financially benefit Hunter Biden or any of the Biden family’s business partners,” he told The Epoch Times.
"If Administration officials continue to ignore meaningful oversight," Republicans will "use the gavel to get answers in January,” Comer said, in reference to the expected swing to a Republican majority in the House in the November midterm elections, which would hand GOP lawmakers subpoena power as chairpersons of the chamber's various committees.
“The American people need answers to determine if this is another attempt by the Biden family to peddle access to the highest levels of government to enrich themselves.”
Rep. Ralph Norman (R-S.C.), who also backed the Oversight Committee request, said the sale demonstrates the current administration’s “rank incompetence.”
White House Pushes BackIan Sams, a special assistant to Biden and spokesman for the White House Counsel’s Office, responded to the Republican claims on July 22, calling them “ridiculous and false.”
The DOE is "required by law to sell it ‘in a competitive auction to the highest bidder,’ regardless of whether that bidder is a foreign company," he told Fox News, noting that the Trump administration, in 2017, also sold a half-million barrels of crude oil from the reserve to China’s state-run PetroChina International through the same "competitive bidding process."
Sams also stressed that Biden “had no personal involvement in this process whatsoever."
But Sams’s statement may not have presented the full picture, according to Daniel Turner, founder and executive director of Power the Future, a nonprofit group advocating for energy workers.
“The White House has pushed back as saying we have sold in the past to the communist Chinese. And that is true. We sold when our SPR was nearly full and oil was not at record highest and the world was at relative peace,” he told The Epoch Times. “Times change, and thanks to this president, they have not just changed but become worse, and our policies must change with them.”
DOE officials didn't respond by press time to a request by The Epoch Times about its buyback plan and Republican lawmakers’ concerns.